THE NUMBER of new homes built in the Republic in the first five months of the year was down 33 per cent year on year at 23,570, according to figures released yesterday by the Department of the Environment.

Its quarterly Total House Completions report says 23,569 new homes were built in the Republic in the first five months of the year. This is one-third fewer than the same period in 2007.

The news is further evidence of a slowdown in the building industry. Earlier this week the Central Statistics Office said employment in the business was down almost 14 per cent this year.

Speaking at a European building industry conference last week, Minister for Finance Brian Lenihan acknowledged that the Republic's house-building industry had come to a "shuddering halt". Mr Lenihan said a natural slowdown in an unsustainable rate of house building had coincided with the credit squeeze.

Commenting on the department's figures yesterday, Goodbody Stockbrokers economist Dermot O'Leary predicted that 48,000 new homes will be built in the Republic this year. He estimated that the rate of decline in house building would reach 46 per cent by the end of the year, meaning some 48,000 new homes would be completed in 2008.

"Within the Economic and Social Research Institute's forecasts released earlier today, an assumption was made that only 40,000 units would be completed this year," Mr O'Leary said.

"For this to happen, output would have to fall by 63 per cent in the final seven months. This seems overly aggressive to us."